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2020 COLA 401(k) Limits and Retirement Plan Limit Increases

Higher 401(k) Limits and More

The IRS released the cost of living adjustments (COLA) for various retirement plan limitations that will take effect on January 1, 2020. 401(k) Plan Sponsors and plan participants enjoy saving even more for retirement.

Many of these limits, including 401(k) deferrals and catch-up deferrals, are increasing.

The limits most frequently asked about are those that are due for an increase! These limits include:

  • the annual compensation that is considered for plan purposes,
  • the salary deferral 401(k) limit (including catch-up), and
  • the total amount that can be contributed on behalf of any participant in a defined contribution (including 401(k)) plan.

 

Plan Section Limit 2019 2020
Maximum Defined Contribution Annual Additions $56,000 $57,000
Salary Deferral 401(k)/403(b) Limit $19,000 $19,500
Catch-Up Limit $6,000 $6,500
Maximum Compensation for Retirement Plan Purposes $280,000 $285,000
HCE Compensation Limit $125,000 $130,000
Key Employee Officer $180,000 $185,000
Key Employee 1% Owner $150,000 $150,000
Social Security Taxable Wage Base $132,900 $137,700

More Information on COLA Limit Increase

Learn more about these increases and how they impact your retirement plan by contacting Uniglobal and your Uniglobal consultant or by visiting the IRS website to get a Retirement Savings Check-Up. The IRS page COLA Increases for Dollar Limitations on Benefits and Contributions expands on the highlights in this post.